By ALEX VEIGA
The average rate on a 30-year mortgage in the U.S. edged lower this week, ending a six-week climb.
The rate slipped to 6.78% from 6.79% last week, mortgage buyer Freddie Mac said Thursday. That’s still down from a year ago, when the rate averaged 7.4%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. The average rate slipped to 5.99% from 6% last week. A year ago, it averaged 6.76%, Freddie Mac said.
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Mortgage rates are influenced by several factors, including the yield on U.S. 10-year Treasury bonds, which lenders use as a guide to price home loans. Bond yields have been rising in recent weeks following encouraging reports on inflation and the economy.
Last week, bond yields surged on expectations that President-elect Donald Trump’s plans to lower tax rates, increase tariffs and reduce regulation could ultimately lead to higher U.S. government debt and inflation, along with faster economic growth.
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The yield on the 10-year Treasury was at 4.41% at midday Thursday. It was at 3.62% as recently as mid-September.
Despite its recent upward move, the average rate on a 30-year mortgage is still down from 7.22% in May, its peak so far this year. In late September, the average rate got as low as 6.08% — its lowest level in two years.
Economists predict that mortgage rates will remain volatile this year, but generally forecast them to hover around 6% in 2025.
Elevated mortgage rates and high prices have helped keep the U.S. housing market in a sales slump going back to 2022.